| The purpose of this study was to create a bankruptcy predictor for higher education institutions. After a review of existing research, a clear need for a failure prediction method was discovered. The existing methods used by colleges and universities were either created for different sectors of businesses or lacked the transparency needed to allow the administrators the ability to verify rankings that the universities received. In this study, two different predictor models were created. Both utilized log regression models created for that purpose. The first model, the higher education bankruptcy predictor financial model, mimicked the Altman Z-model and contained five financial ratios. The second model, the higher education bankruptcy predictor model, used a larger sample of variables including financial and academic variables and was solved using logit regression. Both models proved to be effective at classifying closed and sustaining universities/colleges. |
